A mid-February press release, titled "State of Entrepreneurship: Mixed Indicators Prompt Call for Entrepreneurial Renewal," from the Ewing Marion Kauffman Foundation (www.kauffmann.org), an organization with a focus on promoting entrepreneurial activities in the U.S, suggests that, while capital is becoming more available for businesses in general, it isn't as available for small business start-ups. In addition, fewer people are interested in starting new businesses anyway.
The release noted that the availability of venture capital and angel investing has surged recently. In fact, more venture capital had been invested in the first three quarters of 2014 than in any single year since 2001. However, business creation remains slow, and access to capital is difficult for young companies. Adding to the challenge is that survival rates of new businesses have been falling since the early 1990s.
"The United States doesn't just need economic growth," said Wendy Guillies, acting president and CEO. "We need economic renewal. We're optimistic that the boomers and millennials together can lead the entrepreneurship renewal that America sorely needs."
Recommended For You
Guillies cited data from a Kauffman Foundation report, "The Future of Entrepreneurship: Millennials and Boomers Chart the Course for 2020." The report noted that venture and angel investment levels in recent years mirror those of the late 1990s and very early 2000s. In addition, startup valuations have skyrocketed.
However, the data also show that U.S. business creation is trending downward. New firm survival rates have fallen for nearly 25 years, and high-growth firms are exhibiting less dynamism. The report defined dynamism as the rate at which employees change jobs and at which businesses start and fail, grow and shrink. These trends could portend to lower economic growth.
Given the conflicting data, the report noted that observers disagree about whether entrepreneurship is on the brink of resurgence, or whether it has reached a "new normal" of low rates of entry and growth.
The report noted that Millennials (those born between 1981 and 1997), typically possess strong IT skills and are thus well-positioned to turn technologies into new entrepreneurial ventures. In addition, they have attained high levels of education, which is also conducive to starting new businesses. Millenials are also nearing the traditional "peak age" bracket for entrepreneurship, which is considered to be about 40, and will comprise the largest cohort at that age in American history.
However, many of these Millennials are burdened with student loan debt and have suffered financial setbacks as a result of the Great Recession. In addition, while entrepreneurship education has flourished on college campuses, it has yet to be determined whether these courses lead to more business startups.
The report also noted that Baby Boomers (those born between 1946 and 1964) have been, and will continue to be, an entrepreneurial generation, especially as they live longer and work longer.
However, many Boomers, like many Millennials, were also hit hard by the Great Recession, and thus find it difficult to afford to start new businesses. In addition, the report added, the pace of Boomer business startups is likely to slow down as this cohort ages. One reason is that more Boomers are staying in the labor force for reasons of financial security, and are thus less likely to retire early and start their own businesses.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
